US Refiners Cash In On Iran Conflict-Driven Fuel Shortages
The ongoing conflict in Iran has led to an extraordinary earnings season for US refiners. Despite Brent crude prices falling to around $90 per barrel from a wartime peak of $126, the shortage of refined fuels has deepened.
Global refinery throughput in July was nearly 5 million barrels per day below year-earlier levels due to Middle Eastern refineries remaining constrained and Ukrainian attacks pushing Russian processing close to a 20-year low. US refiners have stepped into the gap, running at or near record utilization rates and exporting more fuel into a market increasingly short of diesel, gasoline, and jet fuel.
The US diesel crack spread hit an all-time high of $102.20 per barrel on Monday. Shares of Marathon Petroleum (MPC), Valero Energy (VLO), and Phillips 66 (PSX) have gained 110%, 98%, and 75% respectively, easily outpacing the S&P 500 Energy sector's 36% gain.
Marathon delivered one of the quarter's largest revenue beats, reporting $52.34 billion against a consensus estimate of $40.87 billion. Phillips 66 reported $52.04 billion in revenue, while Chevron reported $67.20 billion in sales and other operating revenues, or $70.06 billion including other income.